CF Industries Holdings Inc. reported a third-quarter net loss attributable to common stockholders of $30 million ($0.13 per diluted share) on net sales of $680 million compared to the year-ago net income of $90 million ($0.39 per share) and $928 million, respectively.
CF said the pricing for nitrogen products in the U.S. Gulf declined during the third quarter, often trading below international parity, as seasonal decreases in agricultural demand were compounded by delayed customer purchasing activity, resulting in multi-year lows in product prices for all major products.
“CF remains well-positioned with enduring structural advantages despite the challenging market environment,” said Tony Will, CF president and CEO. “The versatility of our unmatched production and distribution system allows us to meet evolving customer needs, and our imminent capacity increase continues to support our cash generation capability. With these elements in place, CF remains the best-positioned company to benefit from recovery in the sector.”
CF said conditions have come to weigh on Chinese production and urea exports from that country are down, with this affecting prices. It said while the average U.S. Gulf urea barge price was approximately $180 st for the third quarter, it approached $200 at the end of the quarter and has steadily increased into the fourth quarter.
CF says the agricultural outlook for North America suggests continued profitability at the farm level for corn and soybeans despite less profitable acreage in the Western Cornbelt and Southeast. Accordingly, planted acres for corn are expected to decline to approximately 88 million acres in fertilizer year 2017 compared to approximately 94 million acres planted in fertilizer year 2016.
CF gave an update on its Port Neal, Iowa plants, saying they are in the process of starting up. Gas has been introduced into the ammonia plant and production is expected soon. The urea plant commission will parallel the ammonia plant and the granulation unit was successfully tested in September.
Going forward, CF said accelerated depreciation on capacity expansion projects drive an estimated tax refund of approximately $800 million of cash in 2017 from carrybacks of current year tax losses to prior tax years.